How does Chapter 7 bankruptcy work?

When a debtor declares Chapter 7 bankruptcy it means that all the debtors’ assets will be liquidated and the proceeds from the liquidation sale will be used to pay the creditors in full or in part. When the process has been completed the greatest majority of debt is discharged thus allowing the debtor to get a fresh financial start. Although it is a common form of bankruptcy you will want to work with a Chapter 7 bankruptcy lawyer in Royal Palm Beach. Chapter 7 is applicable to individuals as well as businesses.

The whole process starts with the petitioner filing papers in bankruptcy court. The petitioner must be in a position to prove beyond doubt that he or she is not capable of reorganization or preparing a repayment plan and along with this, a complete list of all creditors and the amount owed to each along with a full list of all assets owned by the petitioner. Once the court has reviewed the submissions and made the determination that debtor can indeed proceed with a liquidation bankruptcy, a meeting of all the creditors is called for. At the creditors meeting the debtor and the creditors discuss the assets which will be liquidated and compute an approximate amount that will be available to settle the debts. It is now when the creditors can agree to partial repayment or they can refuse to settle if they have reason to believe that the debt was related to fraud or other illegal activities. Your Chapter 7 bankruptcy lawyer in Royal Palm Beach will be a in a position to advise full details of what debts are eligible for forgiveness and which are not.

The process takes somewhere between four and six months to complete and can become complex. Many petitioners will hire a Chapter 7 bankruptcy lawyer in Royal Palm Beach to advise them all the way. Certain assets owned by the debtor are declared exempt which simply means they are not part of the sale. If the creditors are of the opinion that other assets are worthless, they too will be declared exempt, even though technically they are not. The sale is handled by a court appointed trustee who attempts to sell the assets at the best possible price.

If you need a Chapter 7 bankruptcy lawyer in Royal Palm Beach you will be welcome at the law offices of Sean I. Koplow. Call today for a free consultation.